Consumer valuation of energy-saving features of residential air conditioners with hedonic and choice models
Shigeru Matsumoto ()
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Shigeru Matsumoto: Aoyama Gakuin University
Empirical Economics, 2018, vol. 55, issue 4, No 15, 1779-1806
Abstract The promotion of energy-efficient appliances is necessary to reduce the energetic and environmental burden of the household sector. However, many studies have reported that a typical consumer underestimates the benefits of energy-saving investment on the purchase of household electric appliances. To analyze this energy-efficiency-gap problem, many scholars have estimated implicit discount rates that consumers use for energy-consuming durables. Although both hedonic and choice models have been used in previous studies, a comparison between the two models has not yet been made. This study uses point-of-sale data about Japanese residential air conditioners and estimates implicit discount rates with both hedonic and choice models. Both models demonstrate that a typical consumer underinvests in energy efficiency. Although choice models generally estimate a lower implicit discount rate than hedonic models, the latter models estimate the values of other product characteristics more consistently than choice models.
Keywords: Choice model; Energy efficiency gap; Hedonic model; Implicit discount rate; Residential air conditioners (search for similar items in EconPapers)
JEL-codes: D21 D81 Q41 (search for similar items in EconPapers)
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